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Optimizing Global Virtual Teams for Innovation

1. This document discusses managing virtual teams for open innovation in the Global Business Services industry. It focuses on how human dimensions, team climates, technological features, and team diversity impact virtual team performance. 2. The study collected data from 263 participants in the Malaysian Global Business Services industry to analyze the relationships between these factors using structural equation modeling. 3. The findings show that team climates like cohesion, confidence, and skills/abilities influence human dimensions like trust and creativity, which then affect virtual team performance. However, the extent of a team's virtuality did not moderate the relationship between creativity/trust and perceived performance.

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0% found this document useful (0 votes)
137 views21 pages

Optimizing Global Virtual Teams for Innovation

1. This document discusses managing virtual teams for open innovation in the Global Business Services industry. It focuses on how human dimensions, team climates, technological features, and team diversity impact virtual team performance. 2. The study collected data from 263 participants in the Malaysian Global Business Services industry to analyze the relationships between these factors using structural equation modeling. 3. The findings show that team climates like cohesion, confidence, and skills/abilities influence human dimensions like trust and creativity, which then affect virtual team performance. However, the extent of a team's virtuality did not moderate the relationship between creativity/trust and perceived performance.

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mesba Hoque
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

The current issue and full text archive of this journal is available on Emerald Insight at:

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Managing
Managing virtual teams for open virtual teams
innovation in Global Business for OI

Services industry
Lee Heng Wei 1285
School of Business, KDU Penang University College, George Town, Malaysia and
Received 16 August 2017
School of Management, Universiti Sains Malaysia, Revised 20 September 2017
Minden Heights, Malaysia Accepted 1 October 2017

Ramayah Thurasamy
School of Management, Universiti Sains Malaysia,
Minden Heights, Malaysia, and
Simona Popa
Universidad Catolica San Antonio de Murcia, Murcia, Spain

Abstract
Purpose – The purpose of this paper is to investigate the impact of human dimensions, team climates, and
technological features on Global Virtual Team (GVT) performance in the Malaysian Global Business Services
(GBS) industry. Attention has also been paid to examine the moderating effect of team diversity and the
extent of virtuality on GVT performance.
Design/methodology/approach – Data were collected using structured questionnaire and tested
using partial least square – structural equation modelling. The authors collected 263 sample and
the assessment of reflective measurement models, structural model, reliability and validity were conducted
subsequently.
Findings – This paper found that team climates like team cohesion, team confidence, and team knowledge,
skills, and abilities demonstrated different impact on the human dimensions which include trust and
creativity. It will then subsequently affect GVTs’ performance. Besides, team diversity which comprised of
three major components that include age diversity, functional diversity, and attitudes/values diversity was
found to moderate the relationships between the antecedents and consequent. In spite of that, the extent of
virtuality was found to have no moderating effects on the relationships between the team creativity and
trust and perceived team performance.
Originality/value – As nowadays an increasing number of firms are becoming global, inquiring into GVTs
efficient management is of crucial importance for successful implementation of open innovation practices,
while GBS companies could represent the most suitable setting to examine the GVT’s underlying principles.
This paper integrates adaptive structuration theory with input-mediator-output-input model to provide a
holistic study on GVTs’ performance. In addition, this study also illustrated how the extent of virtually can be
measured quantitatively.
Keywords Team performance, PLS, Adaptive structuration theory, Global virtual team,
Mediator-output-input model
Paper type Research paper

1. Introduction
1.1 Open innovation and Global Virtual Teams (GVT)
Nowadays an increasing number of firms are relying more on collaboration networks in
order to share knowledge and foster innovation (Huggins and Thompson, 2015; Messeni
Petruzzelli et al., 2009). This emergent trend towards opening the innovation process has
been first identified by Chesbrough (2003) as “open innovation” (OI). The basic premise of OI
is managing inflows and outflows of knowledge for improving internal innovation and Management Decision
maximising its external exploitation (Cheng and Shiu, 2015; Martinez-Conesa et al., 2017). Vol. 56 No. 6, 2018
pp. 1285-1305
The establishment of this new concept and its coincidence in time with the growing interest © Emerald Publishing Limited
0025-1747
for outsourcing, offshoring, collaboration, organisational agility and flexibility permitted DOI 10.1108/MD-08-2017-0766
MD researchers to reconsider innovation strategies in the light of an increasingly networked
56,6 world (Huggins and Thompson, 2015). As enterprises, customers and working force has
increasingly dispersed across the world, companies had to embrace GVT. Accordingly,
effective collaboration between globally distributed employees has become essential for
improving innovation and creating competitive advantages (Castellano et al., 2016). In this
context, Global Business Services (GBS) emerge as a new wave of business models that offer
1286 companies access to innovations, skills and expertise across the globe. While outsourcing
and offshoring have started initially in one region, GBS companies hold the potential
advantage that they operate globally or multi-region both in terms of delivery as well as
consumption (Wirtz et al., 2015).
OI permits firms to explore outside knowledge and to externally exploit existing internal
resources in order to gain competitive advantages (Martinez-Conesa et al., 2017). In the specific
context of GBS companies, efficient flows of knowledge are even more relevant because the
industry competes on an intangible globally oriented basis. At the same time, GBS companies
have advantages over locally oriented firms in that they are more likely to benefit from outside
knowledge due to socio-cultural diversity of GVTs. However, despite the great pressure of
business environment trends, some authors found that many firms are still reluctant to open
up their innovation strategy through the use of OI practices (de Wit et al., 2007). Previous
literature suggests that besides firm demographics (size, age, market share, location or
ownership), organisational culture and employees’ characteristics have a significant impact on
the adoption of OI practices (Harison and Koski, 2010; Huizingh, 2011). For instance, the
resistance of employees and lack of internal commitment have been pointed out as strong
barriers to the adoption of OI practices (Chesbrough and Crowther, 2006; Van de Vrande et al.,
2009). In the case of GBS, promoting openness and collaboration is even more challenging due
to cultural, language and status barriers and geographic distance that may appear between
members of GVT (Manning et al., 2015). This draws attention on the importance of GVT
management for successful implementation of OI practices. As a consequence, inquiring into
the factors that enhance the performance of GVTs is imperative while GBS companies could
represent the most suitable setting to examine the GVT’s underlying principles.

1.2 GBS in Malaysia


Today, the GBS industry is fast gaining momentum in Malaysia. This industry is one of the
key focussed areas in the country’s Economic Transformation Plan. In order to grow this
industry, various policies have been crafted. For instance, among the most relevant initiatives
there is the Multimedia Super Corridor (MSC) project. The company awarded with MSC
Malaysia status will be able to enjoy several privileges offered by the government, such as
financial aids, incentives and rights, advanced telecommunication infrastructures, ease of
access to a skilled talent pool and resources in information and communication technologies
(ICT), and protection by cyber laws (intellectual property protection). To promote the
Malaysian industry forward with ICT, MSC Malaysia has classified businesses into four
clusters, which are Information Technology cluster (INFOTECH), Creative Multimedia Cluster
(CMC), Institute of Higher Learning and Incubators cluster, and GBS. Compared to the other
clusters, for the past four years the GBS cluster contributes the most regarding total export
sales and total employment opportunity for knowledge workers comparing to other clusters.
At the same time, in recent years the total number of active GBS registered within MSC
Malaysia has been increasing progressively. The data provide convincing evidence that GBS
play a vital role in nourishing local knowledge workers by providing more job opportunities
and sustaining the country’s gross domestic product performance. Thus, GBS industry is set
to be one of the key drivers to convert Malaysia into a high-income, knowledge-based
economy. This industry is aiming to establish Malaysia as a world-class GBS hub by 2020.
The ability to collaborate in a diverse and virtual environment to achieve company objectives
is becoming increasingly important for individuals working in a GBS company. Therefore, Managing
participation in the GVT is important and essential for them to increase their capabilities as an virtual teams
independent unit as well as the capabilities of the network as a whole. for OI
1.3 GVT challenges
Trust is espoused as the most vital factor in affecting team effectiveness (Pangil and Chan,
2014). In the case of GVTs, building trust in virtual environments is especially challenging 1287
because of the lack of face-to-face interaction (Castellano et al., 2016; Soto-Acosta and
Cegarra-Navarro, 2016). Lack of trust will affect perceived team performance (Robert et al.,
2009). In addition, team cohesion is indispensable in uniting individual contribution to
become collective efforts. Nunamaker et al. (2009) observed that GVT members lack
motivators to perform compared to the face-to-face team. The lack of face-to-face interaction
among GVT members makes it difficult for the enthusiasm of one member to inspire others.
In addition, although GVTs offers an effective way in combining various talents within an
organisation regardless geographical limitation, the negative impacts of team diversity
should not be underestimated. Problems like miscommunication, increased level of
misunderstanding, increased conflict, differences in values systems, and decreased team
cohesion are identified in previous literature as detractors of GVT performance (Li, 2013).
Nevertheless, literature suggests that the main diver for GVTs performance is team
confidence. Team confidence is developed when members familiarise themselves with the
abilities and skill set which each member owned. The problem with GVTs is that
the members rarely meet face-to-face and primarily rely on ICT to communicate. Thus, the
communication tends to be less personal and limited to formal discussions. As a result, it is
particularly difficult to establish team confidence in a GVT.
GVTs are mostly task-oriented, and involve communication that is hard to be
social-emotional. Consequently, the ability to use ICTs to communicate and complete the task
would directly influence on perceived team performance. GVTs are a great way to enlarge a
team’s capacity to generate novel and useful ideas. The essential factors contributing to this
capacity rely heavily on team creativity. Bringing together a vast array of individuals from
different backgrounds and origins will not necessarily make the team creative. Therefore, how
to create and enhance team creativity has always been a great challenge for the GVT manager.
Technological innovations never stop advancing, and many collaboration tools have emerged
and are being increasingly used today. All these technological innovations are designed to
reduce the gap between virtuality and reality. Thus, the challenges stem from managing the
whole spectrum of communication in GVT.
Although there are antecedents in previous literature that address the building of
cohesion, confidence and trust in virtual teams (Boies et al., 2015; Fransen et al., 2015;
Turner et al., 2016) there is a need for further research on the antecedents of team
creativity and trust and the consequences on team perceived performance, as new
technological innovations pose new challenges for efficient management of GVTs.
To address these issues, this paper develops and tests a research model by considering
literature that covers human dimensions, team climates and technological features as well
as their consequences on GVTs perceived performance. Attention has also been paid to
the moderating effects of team diversity and the extent of virtuality. The remainder of the
paper is organised as follows: the next section presents the virtual team theories that form
the theoretical framework of the study. Following that, the research model and hypotheses
development justifications are provided. Then, research methodology drawing from a
sample of 263 participants from the Malaysian GBS industry, data analysis and results
are examined. Finally, the paper ends with the discussion and conclusions related to
research findings, contributions for research and practice as well as limitations and future
research directions.
MD 2. Theoretical framework
56,6 2.1 Virtual team theories
One of the prominent works in extending structuration theory was the introduction of
adaptive structuration theory (AST) by DeSanctis and Poole (1994). The effort to extend
structuration theory is significant in two aspects: first, AST did not merely identify the
constructs. Instead, AST emphasises that social structure consists of structural features and
1288 elements of the feature. Moreover, work task, organisational environment, and internal
group structure also need to be considered. Second, AST has four aspects of appropriations,
which are appropriations moves, the faithfulness of appropriations, instrumental uses, and
attitude towards appropriations. Thus, AST holds the position that the technology adoption
process varies among individuals and is mainly due to the consequence of people actively
selecting how the structures are to be used. Therefore, AST can overcome the limitations of
structuration theory, which gives little attention to IT.
Another essential model used by researchers in the study of team performance is an
input-process-outputs (IPO) model. This model follows system theory in which team input
affects group process and subsequently leads to team outcome. Team input is referred to as
the design and compositional characteristics of a team. Meanwhile, team process refers to
how teams achieve their outcomes. Similarly, the measurement of team outcomes showed a
myriad of results. However, there is a consensus view that several limitations of this model
need to be recognised. First, this model is unable to capture the emerging states or affective
states because many mediational factors that intervene influence of the input to outcomes
do not process. Second, this model did not recognise the feedback loop because it only
stipulates a single linear path from inputs to outputs. Finally, this model did not capture the
interaction between various inputs and process, between various process, and between
inputs and emergent states as the causal effect moves in a single linear relationship from
inputs to process to outputs. To overcome the limitations mentioned, “process” has been
replaced with “mediator”. The mediator can take in variables from different aspects that
include affective aspects, behavioural aspects, and cognitive aspects. Second, changes on
the IPO model are the introduction of extra “I” at the end of the model to indicate the notion
of cyclical causal feedback. Finally, the removal of the hyphen between letters remarks that
the causal relationship may not be linear, but rather nonlinear. The model after much of
these changes is now recognised as the IMOI model.

3. Research model and hypotheses development


This paper adopted and extended several theoretical perspectives from both AST and IMOI
model. The paper delineated two main constructs in AST (task and organisational
environment and group’s internal structure) and argued that it will affect the appropriation
process within GVTs and the decision outcomes. This model used team knowledge, skills,
and abilities (KSA), team confidence, and team cohesion to predict trust and creativity, and
this behaviour in turn influences a team member’s viability and contribution to perceived
team performance. At the same time, this paper aims at contributing to the theoretical
framework of GVTs by introducing the extent of virtuality as a moderator in the model.
This is opposing to the theory in which technology structural features and spirits was
initially treated as a predictor to appropriation. This model highlights a few key issues and
extends the model by including team diversity as a moderator to examine how
heterogeneous team composition will affect team development. The research model is
shown in Figure 1.

3.1 Team cohesion


Team cohesion is defined as the commitment of each team member to remain united in
the pursuit of the team’s goals and to each member’s affective needs (Subramanyam, 2013).
Team Diversity Extent of Virtuality Managing
• Degree of reliance on virtual tools
• Demographic
• Functional background • The informational value of the virtual teams
• Attitudes and values mediums used
• The synchronicity of interactions
for OI
Team Cohesion

Team Confidence
• Team potency Trust 1289
• Team efficacy
Perceived
Team
Team KSA
Performance
• Communicating virtually
KSAs
Creativity Figure 1.
• Collaborating virtually Research model
KSAs

This factor has been depicted in previous literature as a key antecedent of team performance
(Nootjarat et al., 2015). For instance, Paul et al. (2016) suggest that effective team cohesion in
GVTs will create a positive impact on trust and improve overall GVT’s performance.
Through virtual interaction and collaboration among team members, a climate of trust can
be developed (Brahm and Kunze, 2012). Likewise, a cohesive team creates a shared context
in which team members are engaged constantly and therefore provides a safe and open-
minded environment for effective communication to occur, which utterly is a catalyst for
innovation. Thus, this study hypothesises that:
H1. There is a positive relationship between team cohesion and trust.
H2. There is a positive relationship between team cohesion and creativity.

3.2 Team confidence


Team confidence is defined as the commonly shared belief within a group of individuals that
they will achieve the desired outcome with their ability to plan and execute the required
strategy (Bandura, 1993). Previous literature shows consensus on that trust reflects the
degree of confidence and goodwill of sharing knowledge and collaborating (Boies et al.,
2015; Fransen et al., 2015; Turner et al., 2016). Detailed examination of the development of
trust by Pfaff et al. (2014) demonstrated that team confidence is positively related to the
development of trust among inter-professional collaboration teams. Besides that, Choi (2004)
revealed that employees’ self-efficacy, creative performance, and employee creativity are
highly related. Similarly, Leal-Millán et al. (2016) suggest that promoting relational
confidence, a shared language and confidence enables team members co-create, share and
absorb mutual knowledge. Moreover, Gumusluoglu and Ilsev (2009) showed that team
efficacy could trigger individual thinking skills and promote creativity. Hence, this paper
hypothesises that:
H3. There is a positive relationship between team confidence and trust.
H4. There is a positive relationship between team confidence and creativity.

3.3 Team KSA


This study examined two dimensions of KSA, which include communicating virtually KSA
and collaborating virtually KSA. Soto-Acosta and Cegarra-Navarro (2016) suggest that using
electronic means to communicate seems to act as a vehicle for enhancing the exchange and
creation of knowledge. Similarly, other authors suggest that the use of online social network
MD enables employees to engage in conversational and collaborative knowledge management,
56,6 which was shown to enrich both their cognitive and creative processes (Palacios-Marqués et al.,
2016; Vătămănescu et al., 2016). Zaugg and Davies (2013) explained that developing soft
communication skills facilitates understanding among GVT members and subsequently
promotes a stronger trust among them. In the same line, Oparaocha (2016) suggests that the
social atmosphere affects the employees’ disposition towards collaboration, knowledge sharing
1290 and innovation in a geographically dispersed organisation. Similarly, virtual team members
rely heavily on a wide range of resources to provide trustworthy clues for themselves.
Trust development in the virtual team depends on the integration of these trust cues, which are
available during the collaboration process (Plino and Burns, 2014). The available evidence
seems to suggest that creative processes underlying the communication process depend
heavily on the communicator’s ability to perform the communication (Wu et al., 2015).
Consequently, a team member’s ability to collaborate in the online environment determines the
dynamic of the knowledge exchange process, which in turn affects the team’s creativity.
This paper thus hypothesises that:
H5. There is a positive relationship between the communicating virtually KSA and trust.
H6. There is a positive relationship between the communicating virtually KSA and
creativity.
H7. There is a positive relationship between collaborating KSA virtually and trust.
H8. There is a positive relationship between collaborating KSA virtually and creativity.

3.4 Trust
Trust creates a strong emotional bond with the virtual team member that promotes
cognitive flexibility and creative thinking (Lee, 2015). The literature shows a general
consensus on that trust plays an important role in generating new ideas. Equally important,
trust enables the team member to interact with one another safely with their uncertainty and
vulnerability resolved (De Jong and Elfring, 2010). Thus, team trust has been identified in
previous studies as a predictor of the goodwill directed towards governing institutions and
sharing information with stakeholders (Gilmour et al., 2015; Turner et al., 2016). Similarly,
the team with a high level of trust is usually depicted as having a cohesive social
relationship in which team members will help each other to achieve their goals (Chang et al.,
2014). Thus, given the evidence that trust is related to creativity and performance, this study
proposes the following hypothesis:
H9. There is a positive relationship between trust and creativity.
H10. There is a positive relationship between trust and perceived team performance.

3.5 Team creativity


Most of the recent literature on creativity and performance agree that creativity allows
innovation and constructive changes in a work setting, which subsequently improves
individual performance (Anderson et al., 2014). Previous studies suggest that emerging
technologies may stimulate both face face-to-face and virtual human interaction and
knowledge sharing (Del Giudice and Della Peruta, 2016). At a more specific level, creativity
enhancing techniques are compatible with the characteristics of technology-based
communications within GVTs (Castellano et al., 2016). Through effective communication,
teams facilitate the exchange of information and create new knowledge and insights (Duan,
2017). Emotional creativity motivates team members to work towards a collective wisdom,
absorbing useful ideas, encouraging team members to express innovative ideas and
promoting employees’ innovative performance (Wang et al., 2015). At the same time, thus, Managing
this paper hypothesises that: virtual teams
H11. There is a positive relationship between creativity and perceived team for OI
performance.

3.6 Team diversity 1291


Previous literature suggests that team diversity in term of expertise, experience and
educational background or social characteristics such as culture, race, gender or age may
potentially stimulate creativity, but it also nurture conflict which, in turn, may reduce
cohesion (Castellano et al., 2016). This paper is set out to investigate the composition of
differences in terms of age, functional background, and member’s perception towards
diversity. Concerning demographic diversity, Gilson and Maynard (2015) suggest that
demographic cohorts (i.e. millennial) play a significant role in moderating the prevailing
relationship between the antecedent and the descendent of GVT performance. Besides,
previous literature suggests that functional diversity contribute to synergy to encourage
innovative ideas, depress group thinking, and increase the quality of decision making
through the breadth of expertise, knowledge, and perspectives with them. However,
functional diversity has not always been positively related to perceived team performance
(Cai et al., 2013). For instance, Castellano et al. (2016) suggest that people having different
functional experiences may set diversified and even divergent perspectives and goals, which
may cause emotional conflicts between teams’ members. In addition, the actual perception
towards diversity will have a direct impact on the diversity-related outcome. As such, this
paper hypothesises that:
H12. The positive relationship between team cohesion and trust will be weaker when
team diversity is high.
H13. The positive relationship between team cohesion and creativity will be weaker
when team diversity is high.
H14. The positive relationship between team confidence and trust will be weaker when
team diversity is high.
H15. The positive relationship between team confidence and creativity will be weaker
when team diversity is high.
H16. The positive relationship between communicating virtually KSAs and trust will be
weaker when team diversity is high.
H17. The positive relationship between communicating virtually KSAs and creativity
will be weaker when team diversity is high.
H18. The positive relationship between collaborating KSAs and trust virtually will be
weaker when team diversity is high.
H19. The positive relationship between collaborating KSAs and creativity virtually will
be weaker when team diversity is high.

3.7 Extent of virtuality


With the progressive migration of enterprises towards the information society, potential
benefits of virtual teaming are gaining recognition. Nevertheless, research has shown that
not all GVTs are created equal and in fact, virtuality lies on a continuum ranging from high
to minimally virtual (Martins et al., 2004). This is because virtuality may also be associated
MD to shortcomings. For instance, previous studies suggest that managers consider that
56,6 bringing employees into close physical proximity is imperative for being creative, especially
in knowledge-intensive contexts (Castellano et al., 2016). When communication is imperfect
due to high virtuality, the impact of trust on perceived team performance may weaken.
Comparatively, the impact of trust on perceived team performance may be stronger if
information richness is enhanced with a supplement from low virtuality. Correspondingly,
1292 when the team operates in a high virtuality state, media used may limit the amount of
information exchanged and thus inhibited the productivity of the interaction. Subsequently,
creativity is also affected. Similarly, when the virtuality of the team is low, team members
may interact productively so that the richness of the information exchanged can be at a high
level. Hence, this study proposes the following hypothesises that:
H20. The positive relationship between trust and perceived team performance will be
weaker when the extent of virtuality is great.
H21. The positive relationship between creativity and perceived team performance will
be weaker when the extent of virtuality is great.

4. Research methodology
4.1 Data collection
The research population in this paper refers to the group of GVT members working in a MSC
Status Company – under the GBS cluster. According to an Outsourcing Malaysia Report
(Captain, 2015), in 2015 a total of 66,055 individuals were working in the GBS cluster.
This paper used a snowball sampling method suggested by Chang et al. (2014) to collect the
sample data. Data collection was initiated by sending an invitation e-mail to the HR
department of each of the companies listed in the MSC companies’ directory – under the GBS
cluster to be forwarded to potential respondents. A total of 393 e-mails were sent and yielded
32 responses. The referral chains started with the 32 personnel who indicated their interest in
this study, and an online questionnaire was sent to them. After they completed the
questionnaire, they were asked to forward the online questionnaire to other potential
respondents they believed to meet the qualification criteria. The eligibility of the respondents
was verified through the first two questions asked in the questionnaire (Are you currently a
virtual team member? and, How long have you worked as a virtual team member?). In order to
control and engage the qualified respondents, respondents will be excluded from this study if
their answer is “No” to the first screening question. Second, their experience as a virtual team
member must be at least one year in order to be included in this study. As such, a total of 305
responses were collected with 42 responses being discarded due to qualification conditions not
being satisfied. The remaining 263 responses were used.

4.2 Measurement of variables


All items used to measure the constructs present in the theoretical framework were adapted
from various seminal literature sources, i.e., team cohesion (Carron et al., 1985), team
confidence (Guzzo et al., 1993), team communicating virtuality KSA (Makoul et al., 2007),
collaborating virtually KSA (Cheng et al., 2013), trust (De Jong and Elfring, 2010), creativity
(González-Gómez and Richter, 2015), perceived team performance (De Jong and Elfring, 2010),
extent of virtuality (DeJong et al., 2008). At the same time, Blau’s (1977) bias corrected index
was used to measure diversity as variety in age and functional background, and attitude.

4.3 Data analysis and result


To assess the issue of CMV, Harmon single-factor analysis and confirmatory factor analysis
was used (Podsakoff et al., 2003). The result of un-rotated principle component factor
analysis on all measurement items showed that seven factors were extracted with Managing
eigenvalues greater than 1.0, which accounted for 72.22 per cent of total variance. Besides virtual teams
that, the result also illustrated that the largest variance explained by an individual factor for OI
was 33.75 per cent. Following, a second test using confirmatory factor analysis was
performed by modelling all items as the indicators of a single factor. The result showed a
poor fit (CMIN/df ¼ 8.132, p ¼ 0.000). Thus, the results of both tests indicated that CMV was
not a significant problem for this study. 1293
4.3.1 Assessment of measurement model. Composite reliability was computed to
examine the internal consistency reliability. The composite reliability should be higher
than 0.7 to indicate adequate internal consistency (Hair et al., 2011). Similarly, convergent
validity was established when the multiple items measuring the same construct are
observed to be related to each other. The AVE should be higher than 0.5 to indicate an
adequate convergent validity (Hair et al., 2011). Besides, discriminant validity was
established when items that theoretically should not relate to each other are, in fact,
observed to be not related to each other. This paper adopted the heterotrait-monotrait
(HTMT) ratio of correlations approach (Henseler et al., 2015) to examine the discriminant
validity. HTMT provides two ways to assess discriminant validity: as a criterion or as a
statistical test. As a criterion test, there is a problem of discriminant validity when the
HTMT value is greater than the HTMT0.85 value of 0.85 (Kline, 2011) or HTMT0.90 value of
0.90 (Gold et al., 2011). The second criteria tested the null hypothesis (H0: HTMT ⩾1)
against the alternate hypothesis (H0: HTMT o 1) and if the confidence interval contains
the value of one, this indicates a lack of discriminant validity (Henseler et al., 2015). The
results demonstrate that the set of data is reliable and achieved the convergent and
discriminant validity criterion. Table I shows the measurement model analysis results.
Table II shows the HTMT analysis.
4.3.2 Assessment of structural model. The exogenous variables in the structural model
explain the moderate amount of variance of trust (R2 ¼ 0.354) and creativity (R2 ¼ 0.503).
On the other hand, trust and creativity explained the weak amount of variance in perceived
team performance (R2 ¼ 0.237). Bootstrapping was used to assess the path coefficients’
significance. The minimum number of bootstrap samples was 5,000, and the number of
cases equals the exact number of observations in the original sample. The results showed
that cohesion and confidence had positive relationship with trust ( β ¼ 0.566, t ¼ 7.346;
β ¼ 0.168, t ¼ 3.306). However, communicating virtually KSA and collaborating virtually
KSA was found to have not relationship with trust ( β ¼ −0.079, t ¼ 1.102; β ¼ 0.076,
t ¼ 0.998). Similarly, confidence and collaborating virtually KSA were found to be positively
associated with creativity ( β ¼ 0.627, t ¼ 17.266; β ¼ 0.292, t ¼ 3.863). In spite of that,
cohesion and communicating virtually KSA were found to have not relationship with
creativity ( β ¼ −0.068, t ¼ 0.862; β ¼ −0.115, t ¼ 1.566). Trust had positive relationship with
creativity ( β ¼ 0.116, t ¼ 2.100). Both trust and creativity were found to positively related to
performance ( β ¼ 0.423, t ¼ 10.118; β ¼ 0.156, t ¼ 2.768). As a result, H1, H3, H4, H8, H9,
H10, and H11 were supported while H2, H5, H6, and H7 were rejected. Figure 2 shows
results of the structural equation model estimation.
4.3.3 Assessment of moderating effect. The moderators in this study were team diversity
and extent of virtuality and were operationalised using formative indicators. A two-stage
approach was applied in this study to examine the moderating effect (Henseler and Chin,
2010). The first stage was to estimate the main effects model without the interaction term to
obtain the latent variable scores. Then in the second stage, the latent variable scores of the
exogenous variable and moderator were multiplied to create the interaction term. Then, the
influence of the predictor on criterion variable and the direct influence of the moderator on
the criterion variable was estimated; lastly, the influence of interaction variable on the
MD Construct Loadings AVE CR
56,6
(Threshold value) ⩾ 0.7 W0.5 W 0.7
Team Cohesion
COH3 0.739 0.635 0.897
COH4 0.795
COH5 0.835
1294 COH6 0.803
COH7 0.809
Team confidence
CON1 0.890 0.770 0.909
CON2 0.846
CON4 0.895
Communicating KSA
COM1 0.780 0.674 0.892
COM3 0.850
COM4 0.829
COM5 0.823
Collaborating KSA
COL1 0.770 0.607 0.861
COL2 0.807
COL3 0.774
COL4 0.765
Trust
TRU1 0.839 0.636 0.840
TRU2 0.776
TRU4 0.777
Creativity
CRE1 0.909 0.793 0.939
CRE2 0.900
CRE3 0.905
CRE4 0.845
Perceived team performance
PER1 0.959 0.881 0.967
PER2 0.958
PER3 0.885
Table I. PER4 0.950
Measurement model Notes: AVE, average variance extracted; CR, composite reliability. COH1, COH2, COH8, CON3, COL5, and
analysis results TRU3 were dropped due to their loadings below 0.7. COM2 was dropped to improve the discriminant validity

criterion variable was also estimated. The moderating effect was confirmed if the interaction
effect was significant by running the bootstrapping procedure with 5,000 samples.
The analysis of the moderating effect showed that the effect of the interaction terms
(team diversity × team cohesion; team diversity × team confidence) on trust was significant
( β ¼ −0.107, t ¼ 2.744; β ¼ −0.143, t ¼ 2.365). As such, the moderating effect of team
diversity on the relationship between team cohesion and team confidence on trust was
confirmed. Similarly, the interaction terms (team diversity × team cohesion; team
diversity × team confidence; team diversity × communicating virtually KSA; team
diversity × collaborating virtually KSA) on creativity was significant ( β ¼ −0.150,
t ¼ 2.806; β ¼ −0.137, t ¼ 2.955; β ¼ −0.114, t ¼ 2.374; β ¼ −0.125, t ¼ 2.551). Interaction
plots was plotted to illustrate the moderation effects (Figures 3-8). However, the remaining
paths stipulated in the research model not significantly moderated by team diversity.
As such, H12, H13, H14, H15, H17, and H19 are accepted. While, H16, H18, H20, and H21
are rejected. Table III shows the detailed results.
1 2 3 4 5 6 7

1. Team cohesion
2. Collaborating KSA 0.788
CI0.90 [0.714; 0.858]
3. Communicating KSA 0.712 0.892
CI0.90 [0.641; 0.779] CI0.90 [0.832; 0.948]
4. Team Confidence 0.100 0.143 0.162
CI0.90 [0.083; 0.185] CI0.90 [0.113; 0.212] CI0.90 [0.109; 0.251]
5. Creativity 0.167 0.269 0.058 0.759
CI0.90 [0.094; 0.278] CI0.90 [0.171; 0.375] CI0.90 [0.059; 0.159] CI0.90 [0.694; 0.818]
6. Perceived team performance 0.450 0.473 0.339 0.173 0.277
CI0.90 [0.358; 0.538] CI0.90 [0.369; 0.574] CI0.90 [0.232; 0.445] CI0.90 [0.085; 0.278] CI0.90 [0.170; 0.376]
7. Trust 0.712 0.447 0.443 0.232 0.302 0.529
CI0.90 [0.609; 0.822] CI0.90 [0.309; 0.599] CI0.90 [0.309; 0.582] CI0.90 [0.143; 0.337] CI0.90 [0.199; 0.424] CI0.90 [0.457; 0.605]
Managing

1295
virtual teams
for OI

Table II.
HTMT analysis
MD
56,6 Team Cohesion

0.566***
–0.068 Trust
(R2 = 0.374)
0.168***
Team
Confidence 0.423***
1296 0.627***
Perceived
Team
0.116** Performance
0.079 (R2 = 0.227)
Communicating 0.156***
virtually KSA
–0.115 Creativity
2
(R = 0.537)
–0.076 0.292***

Collaborating
virtually KSA
Figure 2.
Results of main effects
Notes: The dotted line represents non-significant effect. **p < 0.05; ***p < 0.01

4.5

3.5 Low Team


Diversity
Trust

3
High Team
2.5 Diversity

Figure 3. 2
Moderation effects
of team diversity 1.5
on team cohesion
and trust 1
Low Team Cohesion High Team Cohesion

5. Discussion and conclusions


This paper provides confirmatory evidence that trust was positively related to perceived team
performance. Findings from this study show that GVT member will trust each other more
when the team is more cohesive. This is consistent with the work of Paul et al. (2016) that
suggests that effective team cohesion in GVTs will create a positive impact on trust and
improve overall GVT performance. Team confidence will positively affect trust as well. Trust
will be enhanced in a GVT if the team is confident. Findings in the present study are consistent
with the findings in the literature. The literature shows consensus on the relationship between
team confidence and trust (Turner et al., 2016; Boies et al., 2015; Fransen et al., 2015).
However, findings related to the relationship of the communicating virtually KSA on trust
shows contradictory results. This inconsistency may be due to communication and trust are
inseparable in GVTs context. GVTs rely on communication over electronic spaces to structure
common understanding, reliance, behaviour, and relationship. Besides, this paper argued that
the development of trust in virtual collaboration is not necessary to be a static process. Trust
development is different when the team is in different collaboration stages. Cheng et al.’s (2013)
5 Managing
4.5 virtual teams
for OI
4

3.5 Low Team


Creativity

Diversity
3 1297
High Team
2.5
Diversity
2
Figure 4.
1.5 Moderation effects of
team diversity on
1 team cohesion and
Low Communicating High Communicating creativity
Virtually KSA Virtually KSA

4.5

3.5 Low Team


Diversity
Trust

3
High Team
2.5 Diversity

2
Figure 5.
1.5 Moderation effects of
team diversity on
1 collaborating virtually
Low Collaborating High Collaborating KSA and trust
Virtually KSA Virtually KSA

4.5

3.5 Low Team


Creativity

Diversity
3
High Team
2.5 Diversity
2 Figure 6.
Moderation effects of
1.5 team diversity on
team confidence and
1 creativity
Low Team Confidence High Team Confidence
MD 5

56,6 4.5

3.5 Low Team

Creativity
Diversity
3
1298 High Team
2.5 Diversity

2
Figure 7.
Moderation effects of 1.5
team diversity on
collaborating virtually 1
KSA and creativity Low Collaborating High Collaborating
Virtually KSA Virtually KSA

4.5

3.5 Low Team


Creativity

Diversity
3
High Team
2.5 Diversity
Figure 8. 2
Moderation effects of
team diversity on 1.5
communicating
virtually KSA and 1
creativity Low Communicating High Communicating
Virtually KSA Virtually KSA

Path Effect size,


Moderating effects coefficients t-value f2 Results

H12: Diversity × Cohesion → Trust −0.107 2.744** 0.290 Supported


H13: Diversity × Cohesion → Creativity −0.150 2.806** 0.022 Supported
H14: Diversity × Confidence → Trust −0.143 2.365** 0.246 Supported
H15: Diversity × Confidence → Creativity −0.137 2.955** 0.020 Supported
H16: Diversity × Communicating virtually −0.031 0.474 Not Supported
KSA → Trust
H17: Diversity × Communicating virtually −0.114 2.374* 0.035 Supported
KSA → Creativity
H18: Diversity × Collaborating virtually KSA → Trust −0.058 0.776 Not Supported
H19: Diversity × Collaborating virtually −0.125 2.551* 0.037 Supported
KSA → Creativity
H20: Extent of virtuality × Trust → Perceived team −0.008 0.172 Not Supported
performance
Table III. H21: Extent of virtuality × Creativity → Perceived team −0.018 0.345 Not Supported
Results of performance
moderating effects Notes: *po 0.05; **p o0.01
research suggests that trust development in a GVT shows an irregular pattern across Managing
three different collaboration stages; initial stage collaboration, middle stage collaboration, virtual teams
and final stage collaboration. for OI
This paper showed that cohesive team might not necessarily produce creative ideas.
This implied that a highly cohesive team often leads to team conformance in which team
members tend to agree with each other to maintain the coherent atmosphere. As such team
conformance inhibits team creativity. On the other hand, this paper suggested that team 1299
confidence is positively related to creativity. Contrary to expectations, this study did not find a
significant relationship between the communicating virtually KSA and creativity. Literature
argued that through effective communication, teams facilitate the exchange of information and
create new knowledge and insights (Duan, 2017). However, effective communication in a
virtual environment most of the time is hindered by the communication medium. Virtual
communication that solely depends on computer mediated communication technology usually
lacks verbal cues and rituals. This limitation makes effective communication extremely difficult.
The creative process is not a unitary process, but it involves staged processes. It occurs not only
in problem solving but also in information searching and dissonance reduction. The locus of the
creative process in GVTs is no longer the individuals or the firm but increasingly the
collaboration among the GVT members that forms the network. We can expect that GVT
member needs to collaborate in each stage of the creative process before a creative output can be
produced. Creativity takes place when there is a favourable climate in the GVT for their
development to proceed. Among other factors, trust played a critical role in shaping a creative
climate. These findings are consistent with the literature (Lussier et al., 2017).
Team diversity was found to have a moderating effect on the relationship between team
cohesion, team confidence, communicating virtually KSA, and collaborating virtually KSA on
creativity. It might be convincingly argued that team cohesion tends to lead to team
conformance which is not healthy in promoting team creativity. Team creativity requires a
moderate level of team conflict or at least divergent thinking to inspire brainstorming
activities. Similarly, this logic could explain why team diversity moderates the relationship
between the communicating virtually KSA and creativity. Members may have less trust in
each other due to a different background. As a result, communication intensity would possibly
lessen when the GVT members work in an unfamiliar environment in which they do not meet
face-to-face. The positive relationship between collaborating virtually KSA and creativity will
be mitigated when the GVT is highly diverse. As a result, a positive relationship between
collaborating KSA and creativity virtually will be weakened. GVTs with diverse team
members make it very hard for management to establish a cohesive social team. Team
diversity brings in people with different backgrounds and values into the team. Thus, with
more differences being introduced into the team, ceteris paribus, social cohesion will be
lowered. The underlying result demonstrates that the relationship between team confidence
and trust would be weakened when the team diversity is high. When people of different age,
with diverse functional roles, and perceived value towards diversity are put together, extra
effort needs to be exerted to ensure common understanding and shared values are achieved
and comprehended. Generally, the venture to establish a shared understanding in GVTs takes
a long time. As a result, team diversity increases the ambiguity in GVT. Thus, team diversity
may increase the likelihood where an ambiguous situation was perceived as a threat where the
confidence level was reduced and subsequently affecting the development of trust.

6. Contribution for research and practice


First, this study makes a contribution to the theory by postulating extent of virtuality as the
moderator in the theoretical framework. The extent of virtuality captures the aggregated
impact created by the spatial, temporal, and organisational dispersion in GVTs and testing
its impact on the relationship between trust and creativity on perceived team performance.
MD Next, this study introduced team diversity as the moderator variable into the framework.
56,6 This study contributes to the broad knowledge of how team diversity can affect GVTs
performance. The contribution can be observed where this study demonstrates how team
diversity can be measured quantitatively using Blau’s bias corrected index.
This study makes a significant contribution to management practices as well. This study
underscores the need for the organisation to invest in promoting trust and creativity of
1300 virtual team members. This study implies that team cohesion should be considered as the
starting point for trust development. GVT leaders should leverage online tools and instant
messaging platforms to promote the cohesive team. Skype and WhatsApp groups can be
used to provide instant communication, especially informal communication between GVT
members. Other than that, GVTs’ leaders should find ways to include GVTs’ members in
organisational life to avoid feeling isolated. The team should be gathered through some
collaboration activities. GVTs’ leaders could consider introducing some virtual collaborative
games to get GVTs’ members apart from their daily duties. Playing virtual games together
encourages team cohesiveness and improves their understanding of each other.

7. Limitation and suggestion for future research


The first limitation of this study is the unit of analysis in this study. This study did not take into
consideration the impact of different organisation sizes. Organisation size impacts the structure
and design of that organisation in the areas of work culture, diversity, and formalisation.
Additional research may verify the effect of such environment on virtual team performance.
Second, this study did not take a closer examination to the extent of which
the relationship specified in the theoretical model changed over the lifecycle of the GVT.
A longitudinal study could be conducted to further examine the dynamic nature of a GVT
lifecycle. Data can be collected at several intervals over the GVT lifecycle to examine how
the extent to which the relationship specified in the theoretical model changes over time.
The impact of age diversity, functional diversity, and attitudes and values diversity was
aggregated and examined as a whole. As a result, how each dimension of this diversity
impacted the established relationship was not tested. Future research could expand the
dimensions of team diversity and examine the impact of each dimension of team diversity
on GVTs’ performance.
Finally, the findings from this study could not explain how each communication medium
used will affect the relationship. In addition, the extent of virtuality measured in this study
covers only the extent of virtuality created via communication technology. The extent of
virtuality created via collaboration technology was not tested in this study.

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MD Appendix
56,6 Variables Source
Team Cohesion Carron et al. (1985)
• I like the amount of activity I get in this GVT
• I like the activities done in this GVT
• I enjoy my social interactions within this GVT
1304 • If this GVT was to end I would miss my contact with other participants
• Our GVT is united
• Members of our GVT enjoy helping each other if work needs to be done to
prepare for the activity sessions
• Members of our GVT would likely spend time together if the GVT were to
end
• We are good friends in this GVT

Team Confidence Guzzo et al. (1993)


• I believe my team can be very productive
• I believe my team can get a lot done when it works hard
• I believe my team can be good at producing high quality work
• I believe no task is too tough for my team

Communicating Virtually KSA Makoul et al.


• When I communicate with my GVT members, they understand my concerns (2007)
• When I communicate with my GVT members, I can give as much
information as they wanted
• When I communicate with my GVT members, I communicate in terms that
they could understand
• When I communicate with my GVT members, I will check to be sure they
understood everything
• When I communicate with my GVT members, I treat them with respect

Collaborating Virtually KSA Cheng et al. (2013)


• I am interested in collaborating with others in my team
• What I learned from group collaboration can be put into immediate practice
• I have the knowledge to share information with other team members to
enhance our collaboration
• I have the skill to obtain information and make a contribution to team
collaboration
• I have the abilities to influence others through working in the team

Trust De Jong and


• I am able to count on my team members for help if I have difficulties with Elfring (2010)
my job
• I am confident that that my team members will keep me informed about
issues that concern my work
• I can rely on my team members to keep their word
• I trust my team members
Creativity
Managing
González-Gómez
• Our GVT comes up with many new ideas about how work should be done and Richter (2015) virtual teams
• If a new way of doing work is introduced, it often comes from within the for OI
GVT
• We are willing to try creative solutions to solve difficult problems
• Often had a fresh approach to problems

Perceived Team Performance De Jong and 1305


• Compared with the very best team you are working with or have worked with Elfring (2010)
in the past, please rate the performance of the team on the following:
(a) Efficiency
(b) Quality
(c) Adherence to schedule
(d) Work excellence

Extent of Virtuality Based on de Jong


Team members communicate with one another within the team. Imagine all this et al. (2008)
internal team communication. What is the extent of use of each communication
medium for the communication between the team members? Please fill in for each
medium the percentage of use (notice: accumulating all the scores, the total extent
of use must be 100 per cent)

Face-to-face … %
Memo/letter … %
E-mail … %
Chat … %
Teleconference (via audio connection; telephone) …%

Team Diversity Venkatesh et al.


Age Diversity (2003)
Please fill in the number of your GVT members in each of the age group
Baby Boomer (age 50 years old or more) ____
Generation X (age between 40 and 49 years old) ____
Generation Y (age between 22 and 39 years old) ____
Generation Z (age less than 21 years old) ____
Functional Diversity
Please fill in the number of your GVT members in each of the function played
Production-operation ____
R&D and engineering ____
Accounting andfinance _____
Management and administration ____
Marketing and sales ____
Law ____
Personel and labour relations ____

Member’s perception towards diversity


Being diversity is something beneficial to team performance

Corresponding author
Simona Popa can be contacted at: [Link]@[Link]

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